Arbitration Showdown

Mock Hearing: Shin-Soo Choo

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It's salary arbitration season in Major League Baseball, and here at Baseball Prospectus we're holding mock hearings, arguing for or against the actual team/player filing figures before a three-person panel of certified arbitrators. We've selected 10 of this winter's most intriguing, highest-dollar cases to cover in depth over the first two weeks of February (regardless of whether the players' real-life cases remain unsettled). After each side's opening argument and rebuttal/summation below, we'll give you a chance to vote on what you think the result should be before seeing the panel's decision. For more on the arbitration process, read the series intro by Atlanta Braves Assistant GM John Coppolella, listen to his appearance on Episode 35 of Up and In, or check out the BP Basics introduction to arbitration.

In Part Three of this 10-part series, we'll tackle third-time-eligible Cincinnati Reds outfielder Shin-Soo Choo, who is seeking $8 million and has been offered $6.75 million by his employer. He and the Reds have yet to reach a settlement. (*Update* Choo and the Reds avoided arbitration and settled for $7.375 million after this piece was published.)

The criteria will be the quality of the Player’s contribution to his Club during the past season (including but not limited to his overall performance, special qualities of leadership and public appeal), the length and consistency of his career contribution, the record of the Player’s past compensation, comparative baseball salaries, the existence of any physical or mental defects on the part of the Player, and the recent performance record of the Club including but not limited to its League standing and attendance as an indication of public acceptance.

The complete procedure for salary arbitration is available in the Basic Agreement.

First, I'd like to emphasize my client's eagerness to play for the Reds. The thrill that comes from taking the field during a pennant race in front of 30,000 screaming fans is one of the great feelings in this game. His time with the Cleveland Indians—who finished second to last in per-game attendance last season, compared to the Reds’ relatively robust 16th-place finish—taught my client how dedicated and passionate Cincinnati fans are, and he is ready to embrace them. At the same time, Choo wants to be compensated fairly relative to previous cases based on his history of productive performance.

I have every reason to believe Cincinnati will embrace my client in return. Not only is Choo a professional, but he's one of the most dynamic players in baseball. Last season, the only two American League players to hit .280 with an on-base percentage of .370 and 20-plus stolen bases were Choo and Mike Trout, who finished second in Most Valuable Player award voting. Those two share something else in common: Both are fantastic leadoff hitters. The Reds were poor at leadoff hitting last season, ranking 22nd league-wide in leadoff OPS (on-base percentage plus slugging percentage) in the first at-bat of a game and dead last in overall OPS from the first spot in the order, so Choo will turn a weakness into a strength:

But before Choo takes the field to help the Reds win their third division title in four seasons, he hopes to be compensated fairly. The Reds submitted an offer of $6.75 million. We're asking for $8 million, which we believe is a fairer price based on the salaries received by comparable players in recent seasons. Let's touch on two such cases that prove that Choo's request is reasonable.

The first involves Dodgers outfielder Andre Ethier, who after his platform year earned a salary of $10.095 million. As the numbers show, Choo and Ethier had comparable seasons. Choo's average was within the same range, and he had more home runs and runs batted in. He also had an element to his game—the stolen base—that Ethier simply doesn't have. Choo also recorded more than 100 additional plate appearances than Ethier did in his platform year.

The historical results do show that Ethier has been a more common fixture in the lineup, and that he brings more run-producing abilities to the table. But remember that Choo is slated to bat leadoff, not in the middle of the order, so he’ll have fewer batters on base ahead of him to drive in. As a result, his run-creating abilities—especially the stolen bases—have more value to the Reds.

Our other comparable player, Carlos Quentin, made $7.025 million in his platform year, despite making 200 fewer trips to the plate and performing worse in two of our other four statistical categories:

Platform Year

Player

MLS

PA

AVG

HR

RBI

SB

Quentin (2011)

5.065

483

.254

24

77

1

Choo

5.119

686

.283

16

67

21

Year Prior to Platform Year

Player

MLS

PA

AVG

HR

RBI

SB

Quentin (2010)

4.065

527

.243

26

87

2

Choo

4.119

358

.259

8

36

12

Two Years Prior to Platform Year

Player

MLS

PA

AVG

HR

RBI

SB

Quentin (2009)

3.065

399

.236

21

56

3

Choo

3.119

646

.300

22

90

22

Career

Player

MLS

PA

AVG

HR

RBI

SB

Quentin

5.065

2432

.252

121

383

16

Choo

5.119

2965

.289

83

373

85

Note that the track records of both players reveal that Choo is a more durable player. Even though Quentin has more power (which doesn't help his team when he's injured and out of the lineup), Choo again adds speed that the other player doesn't have. In addition, he's the better all-around hitter, with an ability to hit for average and power alike.

Ethier made more than $10 million last season, while Quentin made $7 million. Is Choo's $8 million request that unreasonable? Is he worth less than 80 percent of Ethier? And is he worth less than the unreliable Quentin? The Reds would like you to believe so, but the stats say otherwise. —R.J. Anderson

Club's Presentation

The Cincinnati Reds acquired Shin-Soo Choo in a December 2012, trade with the Cleveland Indians. As a player with more than five years of major-league service, he filed for salary arbitration. The Reds reviewed Choo’s 2012 production, his career contributions, and his performance compared to players at his position and service class, as well as his injury history. Based on that analysis, the Club offered Choo $6.75 million, and the Reds respectfully ask that the Arbitration Panel award him a salary in that amount for 2013.

2012 and Career Contributions
In 2012, his fifth full season with Cleveland, Choo posted the following numbers:

Though his 2012 statistics are solid, flaws are evident upon closer analysis. Choo’s offensive numbers fell into the middle of the pack among regular major-league right fielders: tied for 17th place (of 30) in home runs, 12th in slugging percentage, tied for 14th in RBIs, tied for sixth in stolen bases. His batting average, on-base percentage, and strikeout marks were the second-worst of his career.

Only 10 players in the American League struck out more times than Choo, who continued a career-long trend by striking out in more than 21 percent of his plate appearances. Moreover, he hit into 10 double plays, fifth on the club, and was caught trying to steal bases seven times, 10th most in the league.

Additionally, Choo regressed significantly in both hitting left-handed pitching and defense. The following chart illustrates Choo’s offensive performance by year when facing left-handed pitchers:

Year

PA

AVG

OBP

SLG

HR

RBI

2008

84

.286

.345

.455

3

14

2009

214

.275

.369

.456

6

25

2010

216

.264

.338

.332

1

17

2011

119

.259

.344

.390

1

7

2012

242

.199

.318

.286

2

13

The data reveals a disturbing downward trend in his production against left-handers and raises the possibility that it could become necessary to drop Choo from the everyday lineup in favor of a part-time platoon role.

In the field, Choo made just two errors in 154 games, but his ability to cover ground in right field has regressed significantly according to several advanced defensive metrics. The Fielding Bible, a publication devoted to statistical analysis of defensive performance by Baseball Info Solutions, a company that supplies information to major-league teams, ranked Choo 32nd among right fielders with minus-12 Defensive Runs Saved, a measure of actual runs saved or allowed, compared to the average player. Choo also ranked at or near the bottom among right fielders according to several other fielding metrics, including Total Zone Fielding Runs (minus-15), Ultimate Zone Rating (minus-17) and Fielding Runs Above Average.

Comparative Salaries
The Club’s $6.75 million offer is in line with recent contracts for right fielders eligible for arbitration for the third time. Specifically, it is commensurate with salaries for Corey Hart, Nick Swisher, and Jayson Werth, whose performances as fifth-year players were substantially similar to Choo’s production in his 2012 platform season, as the following chart shows:

Player

Platform

PA

HR

RBI

SB

AVG

OBP

SLG

Next Salary

Werth

2008

482

24

67

20

.273

.363

.498

$5,000,000

Swisher

2009

607

29

82

0

.249

.371

.498

$6,850,000

Hart

2010

614

31

102

7

.283

.340

.525

$6,833,333

Choo

2012

686

16

67

21

.283

.373

.441

TBD

Though Choo’s ability to get on base compares favorably to this group, his slugging percentage, RBI, and home-run marks lag behind the others, all of whom earned less than $7 million the next year. (Werth’s salary is the average value of a two-year deal.)

Choo’s $8 million request matches the 2011 salary earned by Jose Bautista, whose 2010 platform season was far superior, as this chart illustrates:

Player

Platform

PA

HR

RBI

SB

AVG

OBP

SLG

Next Salary

Bautista

2010

683

54

124

9

.260

.378

.617

$8,000,000

Choo

2012

686

16

67

21

.283

.373

.441

TBD

Bautista’s 2010 season was elite. He led the major leagues in home runs and ranked third in both RBIs and slugging percentage. For his performance, he was selected to the American League All-Star team and received an AL Silver Slugger as the best offensive player at his position and the AL Hank Aaron Award as the top hitter in his league. Choo’s statistics, while solid, simply do not rise to the elite level of Bautista’s. With a midpoint of $7.375 million in Choo’s case, it is clear his production places him in the range of $6 to $7 million.

Physical Condition
In his five full seasons, Choo has missed a total of 150 games—an average of 30 a year—with injuries to his hamstring, left elbow, right triceps, left thumb and left oblique. Choo, who turns 31 in July, has played 100 games in a season just three times. The Club asks that the Panel take his age and significant injury history into consideration in valuing his services.

Conclusion
The Reds acquired Choo in large part for his ability to get on base, and the club is eager to add him to the lineup for 2013. However, the statistical data show a decline in both his offensive and defensive production. That trend, combined with a significant injury history and unfavorable comparisons to similar players, is persuasive evidence that Choo’s value lies well below the $7.375 million midpoint in this case. The Reds respectfully request an award of a $6.75 million. —Jeff Euston

Player's Rebuttal/Summation

We would like to respond to three claims put forth by the Reds.

First, Choo's performance against left-handed pitchers. The key to the game is scoring runs, and one of the best ways to do that is by not making outs. Choo's struggles against left-handers are overstated: while his performance versus southpaws last season wasn’t up to his usual standards, he still had a higher on-base percentage (.318) than the average left-handed batter when facing left-handed pitchers (.294), which suggests he was in little danger of being benched against them.

Second, Choo's defense. The Reds are presenting all of these numbers attempting to portray Choo’s defensive performance in a corner outfield spot in a negative light, and yet they still plan to use him in center field—a more demanding defensive position—this season. If the Reds believe Choo is a poor defender, then why are they moving him to a more difficult position?

What’s more, many of the advanced fielding metrics mentioned by the Club are untrustworthy over single-season samples. The creator of UZR once said that one-year samples need to be heavily regressed toward both the league-wide and player-specific mean in order to have any value; if one were to undertake that necessary step, Choo's good ratings in previous seasons would help to paint a more positive picture of his defensive ability. Advanced mathematics aren’t necessary to understand that the Reds' statements about my client's defense don't amount to something substantive. I will add that Choo was second among right fielders in fielding percentage last season and ranks sixth amongst active right fielders in range factor, a measure of how much ground a player covers on defense.

Finally, the Jose Bautista comparison is an interesting one. Let's take a deeper look at it:

Platform Year

Player

MLS

PA

AVG

HR

RBI

SB

Bautista (2010)

5.165

683

.260

54

124

9

Choo

5.119

686

.283

16

67

21

Year Prior to Platform Year

Player

MLS

PA

AVG

HR

RBI

SB

Bautista (2009)

4.165

404

.235

13

40

4

Choo

4.119

358

.259

8

36

12

Two Years Prior to Platform Year

Player

MLS

PA

AVG

HR

RBI

SB

Bautista (2008)

3.165

424

.238

15

54

1

Choo

3.119

646

.300

22

90

22

Career

Player

MLS

PA

AVG

HR

RBI

SB

Bautista

5.165

2721

.244

113

335

23

Choo

5.119

2965

.289

83

373

85

Bautista undeniably had the better platform year. His 54 home runs and 124 RBIs enabled him to make $8 million the following season after making $2.4 million the year before. That's a jump of $5.6 million based on one great year. My client is asking for a raise of $3.1 million, or just over half of what Bautista received. This process asks us to consider not just the platform year, but the player's career contributions, too, and it's clear that Choo has had the better performance than Bautista in the year before his platform year, two years before, and, indeed, over the course of his career. Bautista was worth $8 million because of his amazing season. Choo is worth $8 million because of his body of consistently strong production, which enabled him to have more plate appearances, hit for 45 more points in average, record nearly 40 more RBIs, and steal nearly 60 more bases. Bautista had the better season. Choo had the better career. —R.J. Anderson

Club's Rebuttal/Summation

The player’s representative offers as comparable examples Andre Ethier and Carlos Quentin, whose performances, service time, and salaries differ significantly from those of Choo.

Ethier did earn $10.95 million in 2012 as a player with more than five years of service. However, that contract was signed when he was eligible for arbitration for a fourth time in his career. (Ethier had qualified for arbitration for 2009 with just two-plus years of service.) Choo, on the other hand, did not reach salary arbitration until he had earned three-plus years of service, and he is now eligible for just the third time. The chart below shows the dramatic effect the extra season of arbitration had on Ethier’s earning power.

Andre Ethier

Shin-Soo Choo

MLS

Platform

HR

RBI

Next Salary

MLS

Platform

HR

RBI

Next Salary

0.153

2007

13

64

$387,500

0.119

2006-7

3

27

$390,400

1.153

2008

20

77

$424,500

1.119

2008

14

66

$420,300

2.153

2009

31

106

$3,100,000

2.119

2009

20

86

$461,100

3.153

2010

23

82

$6,000,000

3.119

2010

22

90

$3,975,000

4.153

2011

11

62

$9,500,000

4.119

2011

8

36

$4,900,000

5.153

2012

20

89

$10,950,000

5.119

2012

16

67

TBD

Their salaries were substantially similar until Ethier reached arbitration for the first time and saw his earnings jump 630 percent, from $424,500 to $3.1 million. Choo, by contrast, realized an increase of just 10 percent, from $420,300 to $461,100, after his second full season. The extra season of arbitration for Ethier gave him increased platform salaries in each of the next three years, effectively moving him into a separate category of service time, a step higher than two-year players not eligible for arbitration like Choo. Moreover, Ethier’s home run and RBI totals were superior to Choo’s in nearly every season.

Quentin has indeed posted offensive statistics substantially similar to Choo’s. Quentin holds significant edges in career home runs (137 to 83) and slugging percentage (.492 to .465) with fewer strikeouts (428 to 634). Admittedly, Choo gets on base at a higher rate (.381 to .349), but the players’ salary histories have been very similar, as shown in the following chart.

Carlos Quentin

Shin-Soo Choo

MLS

Platform

HR

RBI

Next Salary

MLS

Platform

HR

RBI

Next Salary

0.065

2006

9

32

$387,500

0.119

2006-7

3

27

$390,400

1.065

2007

5

31

$400,000

1.119

2008

14

66

$420,300

2.065

2008

36

100

$550,000

2.119

2009

20

86

$461,100

3.065

2009

21

56

$3,200,000

3.119

2010

22

90

$3,975,000

4.065

2010

26

87

$5,050,000

4.119

2011

8

36

$4,900,000

5.065

2011

24

77

$7,025,000

5.119

2012

16

67

TBD

Quentin’s salary as a two-time arbitration-eligible player was just three percent higher than that of Choo ($5.05 million to $4.9 million). With Choo now reaching arbitration for a third time, the Club’s offer of $6.75 million is just four percent lower than Quentin’s platform salary of $7.025 million. —Jeff Euston

The Reader Poll

Before scrolling down to read the three-person panel’s decision, record your own decision here:

Burt Fendelman is an attorney with more than 45 years of experience, initially in corporate finance and securities laws working as inside counsel for several major securities brokerage firms. He has performed as an arbitrator for FINRA (Financial Industry Regulatory Authority), the American Arbitration Association, and currently as an arbitrator and mediator for the New York County Lawyers Association in fee dispute-related matters. He is presently a self-described “work in progress”, working with clients in areas related to art and antiques. He attended Washington University in St. Louis and NYU Graduate School of Tax Law, and he now lives in Manhattan.

Doris Lindbergh is a retired lawyer who is an arbitrator with FINRA (Financial Industry Regulatory Authority) and its predecessor forums, the National Association of Securities Dealers (NASD) and the New York Stock Exchange. She also arbitrates for the National Futures Association (NFA). She attended Washington University School of Law and has a Master of Arts from Fordham University. Her employment history includes stints at Wall Street investment banks and, most recently, the MTA New York City Transit Authority, but her most challenging assignment was raising a future Editor-in-Chief of Baseball Prospectus.

David Marcus is a retired lawyer and serves as an arbitrator with the Financial Advisory Regulatory Authority (FINRA). He lives in Metuchen, New Jersey. He attended Columbia College and Yale Law School, after which he served as an enforcement attorney with the SEC. His subsequent career includes working for the New York Stock Exchange heading its regulatory division, and working for several broker-dealers as a regulatory attorney or General Counsel.

The Panel’s Decision

3-0 in favor of the Player

Choo, a national hero in South Korea, is asking a 2013 salary of $8.0 million, an increase of 63%; Cincinnati is offering $6.75 million, an increase of almost 37%. Choo had an off year in 2011 mainly due to injuries, batting only .259. However, he recovered in 2012 with stronger figures: .283 batting average, doubled his home runs total to 16, and a respectable OBP of .376. Cincinnati’s stadium is a smaller park in which he could hit over 20 home runs with more RBIs. His career batting average is .289 with 85 stolen bases, a value for a leadoff batter. I am most impressed that his new team is to play him in center field, the position I consider probably the most important, defensively speaking. I am awarding him his requested amount, $8.0 million. —Burt Fendelman (Doris Lindbergh and David Marcus concurring)

The Sabermetric Perspective/Additional Commentary

We’ve been aiming for some semblance of authenticity in our mock arb cases, so we haven’t held back from trotting out arbitrator-friendly arguments that BP authors might not normally make. Today’s article alone contains more non-judgmental mentions of batting average and RBI than one sometimes sees in a week’s worth of work at this website. When we planned this series, we considered putting a sabermetric spin on the arbitration process, following the procedure described in the CBA but relying on standard BP-style stats and analysis rather than making the arguments one might encounter in an actual hearing. Ultimately, we decided it would be more fun and informative for all involved if we tried to stick to the traditional script. But the “Sabermetric Perspective” part of these pieces was intended to be a place where we could round out any arguments that seemed skewed by the back-of-the-baseball-card stats cited without influencing the outcome of the case.

The first couple cases didn’t really demand a different perspective; the Club arguments against Chase Headley and Jason Hammel didn’t so much downplay what Headley and Hammel had done—which could have been accomplished by, say, ignoring the effects of Petco Park or dwelling on Hammel’s Win-Loss record—as they cast doubt on whether they could be counted on to do it again, a fair enough question to ask about two players who took their games to new levels last season. Shin-Soo Choo, though, isn't coming off a career year. He’s been well above average for a while now, save for his injury-plagued 2011. And he seems like exactly the sort of player whom arb-approved stats would underrate, a well-rounded hitter whose best years, valuable as they were, produced no Black Ink and few immediately memorable counting stats.

Although Choo’s home run and RBI totals have at times lagged behind those of the two comparables chosen by R.J., Carlos Quentin and Andre Ethier, there’s no contest WARP-wise. Choo’s second­-best season by WARP rates substantially better than Ethier’s best. Both Choo and Quentin topped out at 5.9 WARP in their career years, but Choo has had three other seasons more valuable than Quentin’s next-best.

Choo’s slugging is nothing special for a career corner outfielder, but his .381 lifetime OBP ranks 12th among active hitters with at least 2500 career plate appearances. He strikes out too much for that OBP to be built on the kind of flashy batting averages that might have made him more of a mainstream star. Instead, he gets on base with walks and a rare ability to avoid fielders when he does put his bat on the ball. Only two active players with as many career plate appearances have higher BABIPs than Choo: Joey Votto and Derek Jeter, both of whom barely beat him out. Like Jeter, whose career triple-slash line is eerily similar to Choo’s through last season, much of his power is to the opposite field—only four of his 16 home runs last season were pulled. That should serve him well at Great American Ball Park, where he’ll have an easier time hitting home runs to right than he did at Progressive Field, thanks to a lower outfield fence. Mr. Fendelman’s projection for 20-plus homers this season makes sense (and PECOTA concurs, provided Choo plays a full season).

In my Trevor Bauer trade Transaction Analysis, I called Choo “one of the best bargains in baseball for the past several seasons”, noting that the Indians paid him just over $10 million and received roughly 20 wins above replacement in return. It’s nice to see that the panel rewarded his work without a single WARP score in sight. —Ben Lindbergh

In a case like this, would the player also present an argument that he is marketable internationally, thus enhancing his value, if not on the field. Obviously Ichiro was a special case, but it does seem that players from Asia (and potentially other non-American nations) could fairly easily argue their presence is worth some non-trivial sum of money based solely on the marketing and branding value.

The panel cites Choo's status as a "national hero" in Korea as part of the reason for their award. But the player's case never makes this argument. Is there any rule in arbitration hearings that states you have to use the evidence that was presented--kind of like the instructions that juries received? Or is it acceptable for the arbitrators to go out and use any information they want?

The panel's explanation for their decision is bizarre, given that there is $1.25M in play between the two offers.

1) Choo's status as "a national hero in South Korea" is cited, despite appearing in neither side's case. One would think the club might object to the panel bringing in their own topics.

2) Choo's 2012 OBP of .376 is described merely as "respectable", despite the fact that it's a crucial metric, and he was 10th in the AL.

3) The panel states that "Cincinnati’s stadium is a smaller park in which he could hit over 20 home runs with more RBIs." Why would this alter his salary? It's just a consequence of his ballpark's dimensions and meteorology. It doesn't make Choo more valuable, as his home runs diminish in significance in a higher-scoring environment.

4) The panel also notes "I am most impressed that his new team is to play him in center field, the position I consider probably the most important, defensively speaking." Really? More valuable than catcher, shortstop, and second base?

It still boggles me that MLB and players' agents allow millions of dollars to be at stake in front of arbitrators who freely admit (in the first article in this series) to having little understanding of baseball.

If the arbitrator had said something completely ridiculous like "Choo is moving to CF, which I consider unimportant, since they rarely have to perform the crucial task of tagging out runners.", could the player's side contest the validity of the hearing?

Oustanding back-and-forth argument in this one. I thought the rebuttals from the player side really won this, particularly the CF argument and Jose Bautista career comp. That said, the club poked a big hole in the Ethier comp and really dented that the player's case. Unsurprising to me that the votes are so close in this one—it was the first time I split mine.